24 C.F.R. § 886.311
§ 886.311 Term of contract. (24 CFR Part 886)
Operative Text
The contract term for any unit shall not exceed 15 years, except that the term may be less than 15 years as provided under either paragraph (a) or (b) of this section. (a) The contract term may be less than 15 years if HUD finds that, based on the rental charges and financing for the multifamily housing project to which the contract relates, the financial viability of the project can be maintained under a contract having a term less than 15 years. Where a contract of less than 15 years is provided under this paragraph, the amount of rent payable by tenants of the project for units assisted under such a contract shall not exceed the amount payable for rent under section 3(a) of the United States Housing Act of 1937 for a period of at least 15 years. (b) The contract term may be less than 15 years if the assistance is provided under a contract authorized under section 6 of the HUD Demonstration Act of 1993, and pursuant to a disposition plan under this part for a project that is determined by the HUD to be otherwise in compliance with this part.
Under 24 CFR Part 886 § 886.311, housing assistance contracts generally run for a maximum of 15 years, but two exceptions allow for shorter terms. In the first exception, HUD may approve a shorter contract if the project's finances can remain viable without the full 15-year term, though tenant rent obligations tied to that project must still be capped at the statutory level for at least 15 years regardless. In the second exception, a shorter term is permitted when the assistance flows through a specific HUD Demonstration Act authorization and the project is part of an approved disposition plan found to be in compliance with the applicable regulations.
Plain English — not legal advice.
Operators of multifamily housing projects subject to 24 CFR Part 886 § 886.311 should be aware that their assistance contracts are structured around a 15-year ceiling, with shorter durations available only through a formal HUD determination. When a shorter contract is approved under the financial-viability pathway, compliant operators ensure that tenant rent levels remain within the statutory cap for the full 15-year minimum period, even if the contract itself is shorter. Operators pursuing a shorter term under the HUD Demonstration Act pathway typically document that the project meets all applicable compliance requirements under a disposition plan reviewed and approved by HUD.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 886 § 886.311, tenants living in assisted units have a meaningful protection: even if HUD approves a contract shorter than 15 years on financial-viability grounds, the rent limits tied to that assistance must remain in place for at least 15 years. If a tenant believes their rent has been increased beyond what this provision allows, they may raise that concern as a potential violation with their local HUD field office or a tenant-rights organization familiar with federal housing assistance programs. Reviewing the terms of the applicable assistance contract and consulting a housing counselor or legal aid organization can help tenants understand how § 886.311 applies to their building.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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